It’ll cost more than $1.6 million and take over a year to replace the HVAC in the Warsaw City Hall with most of the funding coming from American Rescue Plan Act (ARPA) and a lawsuit settlement.
Friday, the Warsaw Board of Public Works and Safety approved a contract with Core Mechanical Services for $1,652,529 for the HVAC work.
In presenting his recommendation to the board to award the job to Core Mechanical, city engineer Aaron Ott reminded them a couple months ago they approved a Request for Proposals process for a possible HVAC replacement contractor. Selection of a contractor was based on three primary criteria: project approach, experience with similar projects and proposed cost of the project, he said.
Core Mechanical Services was the only company that submitted a proposal on Dec. 5.
“Since then, we’ve been vetting the proposal and having conversations with Core to ensure that the scope of work was well understood before we would develop a contract agreement that everything was as we expected it to be,” Ott said. “We think Core is an exceptional contractor to have the opportunity to work with. They’ve been a great vendor to the city in the past. And to do this very important project, they proposed a cost of $1,652,529. That’s right within the range we were expecting the cost to be and planning for them to be.”
He then recommended the board award the contract to Core.
Of the total cost, $806,604.57 of the city’s ARPA funds have been set aside for the HVAC project at City Hall. Projects using ARPA dollars have to be under contract by Dec. 31, 2024, and spent by Dec. 31, 2026. Ott said the mayor’s office will have to work on where the rest of the funding for the contract will come from.
Mayor Jeff Grose said Ott, Clerk-Treasurer Lynne Christiansen, city attorney Scott Reust and his office have been “working very hard to find and leverage dollars. A lot of credit to Lynne.” The ARPA funds approved by the city council have helped get funding for the project to the $806,604.57.
“So that’s why that amount is in play. There’s some deadlines that have to be met. And as we move into 2025, and looking at the contract even into 2026, we’ll have to work very hard to come up with the other $800,000,” Grose said.
Christiansen said they’ll have the rest of the money for the project, but the ARPA funds have to be committed by the end of this year.
Reust explained, “This was a Request for a Proposal that was sent out, which is a little bit different from a bid process. We asked for contractors to come and look at our problem and look at finding solutions and how they can best do that, which was perfect for this project. And we received a proposal from Core and Aaron’s got quite a bit of the technical ability to know that it was a good proposal. It seems to meet our needs.”
In this particular instance, he continued, Core has worked on City Hall’s current HVAC system for several years now.
“It’s near the end of its useful life, so it’s being replaced, but Core seems to be a good partner in that they’ve been good about working with the city and City Hall up to this point, so I personally am excited about that partnership with them,” Reust said. “And then with this project, as with many of the things, we’re having to purchase quite a bit of mechanicals that are just not sitting on the shelf somewhere. So there’s lead time between Core and their vendors in creating the chilling tower and the big mechanicals that we’re going to need. So this allows them to move forward with placing the order for the heavy mechanicals that we need.”
Reust said Core is working with the city on a timeline for when the project will happen. After the contract is approved, Core will order the equipment that they need. They will start with some outdoor work to not burden City Hall employees and visitors.
“And then we’re forming a plan to probably do parts of City Hall at a time to try to not disrupt the whole City Hall because we can’t close City Hall, we can’t displace every worker. But there will be inconveniences to the public and employees here as they have to move around the building to install the stuff,” Reust said.
Fall 2025 is the tentative time when Core will be in City Hall to begin making the HVAC improvements. Reust said that will probably continue into spring 2026, with the hope that it will be completed by summer 2026.
Acknowledging the public will probably have questions once they learn that the city is going to spend over $1.6 million on the HVAC system at City Hall, Board member George Clemens asked Ott to explain the equipment involved.
“The current system that we have is called a VRF System, and it’s run with refrigerant. Lines going to each of the Daiken units. ... So, in debating the different options of the best way to move forward, we landed on going to a more tradition system rather than a VRF System because all of the piping for a VRF System is bad. That’s what the lawsuit was, it wasn’t installed properly, it’s not the right size. So it basically needs gutted and replaced. It made sense, based on considering all factors, to go to a traditional system where we’re going to have a large cooling tower that’s going to set outside and then each of the units are going to be a heat pump unit with duct work to them,” Ott said.
He said it’ll all be new equipment as if it’s a total new reconstruction of a project.
According to past articles, the city filed a lawsuit in regards to an improperly installed HVAC system in City Hall in Kosciusko County Superior I on Oct. 22, 2020. The city of Warsaw entered into an AIA contract dated Dec. 16, 2011, for the remodeling of City Hall. The performance of the contract resulted in the HVAC being improperly installed, installed out of conformity to the contract documents or being negligently installed. According to the complaint, the systems resulted in malfunctions, degradation of other parts of the HVAC system and building installations.
Grose on Friday said, “The problem is, all of the infrastructure leading to these units throughout the whole building, they were not put in correctly. So it has cost us over these 10, 15 years tens of thousands (of dollars). I wasn’t even aware of it until I came in this year (as mayor). Tens and tens of thousands of dollars just to band-aid it. And then, with the settlement, the decision was let’s go in another direction because we can’t use the current infrastructure here. By putting new infrastructure in, it’s going to be very painful, it’s going to be very costly, but in the end we’re going to have a 15- to 20-year run ... and it’s going to be done right for the next 15 to 20 years.”
Ott said he was shocked at how much money was put into the system just to fix and maintain it. “Moving forward, we were looking at possibly $200,000 a year average to just keep it going, and as things broke needing to replace them. At what point do you do the big thing?” he said.
Reust said while there’s no bright side to spending $1.6 million on anything, the current system has been in place for the last 14 years and defective for most of that time, but the way the timing works out with ARPA and the lawsuit settlement, roughly 70% of the cost of the new system will be covered and it’ll be at least 15 years before the mechanicals need upgrades.
Clemens made a motion to approve the contract as presented, Councilwoman Diane Quance seconded it and it was approved 3-0.